Question

In the long​ run, a perfectly competitive market will A.supply whatever amount consumers demand at a price determined by the minimum point on the typical​ firm's average total cost curve. B.generate a long run equilibrium where the typical firm operates at a loss.C.supply whatever amount consumers will buy at an economic profit price. D.produce only the quantity of output that yields a long run profit for the typical firm.

Answer 1

Answer: Option (A) is correct.

Explanation:

Correct Option: A.supply whatever amount consumers demand at a price determined by the minimum point on the typical​ firm's average total cost curve.

In the long run, equilibrium price of a perfectly competitive firm implies that there is no economic profit for the firm. This situation occur when the marginal cost is equal to the average total cost.

The firm is break even when the price is equal to the minimum point of average total cost of the firm. So, there is no possibility of economic profit for the firm.